Local taxpayers likely skipping out on 'use taxes'

MINNEAPOLIS - These days we pay taxes on nearly everything, but there's one tax, it would be safe to say most of us are not paying. It's called a local use tax.

While "use taxes" are on the radar screen for the Minnesota Department of Revenue, they may not be on the radar of most Minnesotans.

KARE 11 heard about the use tax in Minneapolis through a mail insert which was included with water bills.

The mailing said that residents of Minneapolis who purchase more than $770 worth of items outside of the city are required to pay a half of one percent in local use taxes.

"Which is in lieu of sales tax you didn't pay because you didn't buy it in Minneapolis," said Minnesota Revenue Department's Keith Getschel.

Let's say you live in Minneapolis, but you shop at the Richfield Best Buy or go to St. Paul for dinner or shop at the Target in Edina, just to name a few. Over the course of the year, for every $1,000 you spend outside of the city, you owe the state an additional $5.

Minneapolis is not the only city with a local use tax, St. Paul has one and there's an entire list of other cities.